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Posts Tagged ‘Larry Page’

The PC is supposedly dying and the Windows 8 debacle is making things worse. But you wouldn’t have guessed that from the latest results at Microsoft. Google is up against it because per click revenue is much lower on mobile technology than on PCs. You wouldn’t have guessed it from the company’s latest results. IBM is back. It is a star of tech again, and growing like it used to in the good old days. Well, you wouldn’t have guessed it from the company’s latest results.

Google profits came in at $3.35 billion in the latest quarter, up 16 per cent from a year ago.

It was good stuff, but there was a whiff of something not quite so good, that creased investor’s foreheads. Per click revenue for Google fell 4 per cent. The explanation of the fall is not rocket science. The move to mobile is hurting, after all.

But CEO Larry Page didn’t want to talk about that when the company’s results were released. Instead he focused on the crazy. He said: “Companies tend to get comfortable doing what they’ve always done with a few minor tweaks…It’s only natural to work on what you know.” He said that Google, in contrast, does the things “no one else is crazy enough to try.” So what are these crazy ideas?

Well there are goggles, and fibre internet, and driverless cars, and bodiless human brains (maybe not the last one).

Microsoft isn’t quite so crazy. It does something rather sensible called selling software for money. Profits were up 17 per cent coming in at $6 billion.

The underlying challenge at Microsoft has not gone away, however. Its profit growth came from cost cutting and changes in its strategy with corporate clients. It is hard to see growth continuing from these areas for very long.

The snag is that innovators’ dilemma shows that really sensible strategies have a tendency to look dumb when we go through a phase of disruptive technology. The crazies can look quite smart.

Talking of smart, IBM – the company that suffered such a pasting from Microsoft all those years ago – embraced Linux, learnt the joys of open source software and engaging in tech communities, but didn’t have such a good quarter. Operating income was up 3.4 per cent to $3.4 billion but sales fell 5 per cent.

CEO Ginni Rometty blamed the disappointing performance on the company failing to close what she called “a number of software and mainframe transactions that have moved into the second quarter.”

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